Oil Prices Rise on OPEC+ Comments, But Still on Track for Weekly Decline

 

Oil prices extended gains on Friday, supported by Russian Deputy Prime Minister Alexander Novak's suggestion that OPEC+ could reverse its output increase after April. However, concerns over U.S. tariff policies kept the market on track for a more than 3% weekly decline.

Price Movements:

• Brent Crude Futures: Up by $1.17, or 1.68%, reaching $70.63 per barrel by 1252 GMT.
• West Texas Intermediate (WTI) Futures: Up by $1.15, or 1.73%, to $67.51 per barrel.

During the session, Brent reached $70.76 and WTI hit $67.68, after Novak indicated that OPEC+ would proceed with its planned output increase in April but might reassess the situation afterward.

Market Sentiment:

• OPEC+ Considerations: Novak suggested that the group’s assessment was that the market could absorb additional barrels without significant price impacts, but the recent price action suggests otherwise.
• Harry Tchilinguirian from Onyx Capital Group noted that the caution expressed by Novak reflects OPEC+’s conditionality on market conditions, determining whether they continue reducing their voluntary cuts.

Weekly Decline:

• Brent: Set for a 3.4% decline, marking its biggest weekly drop since November 11.
• WTI: On track for a 3.2% weekly decline, the largest since January 21.

Brent prices hit their lowest since December 2021 on Wednesday after rising U.S. crude inventories and the OPEC+ decision to increase output quotas.

Supply News:

• U.S. Tariff Policies: President Trump’s administration is considering a plan to inspect Iranian oil tankers at sea to reduce Iranian crude exports, which could further impact global oil supply.
• OPEC+ Output Increase: OPEC+ plans to add 138,000 barrels per day to the market starting in April, though Novak clarified that the additions would only be made if they can be absorbed without disrupting market balance.

Trade Policy Uncertainty:

The global market remains sensitive to U.S. trade policies. On Thursday, Trump suspended the 25% tariffs on most goods from Canada and Mexico until April 2, although tariffs on steel and aluminum will still take effect on March 12. While the delay in tariffs offers some relief, market experts, like Rystad Energy’s Mukesh Sahdev, believe the market is still navigating uncertainty between trade policy changes and concerns over oversupply.